STOCKHOLDERS AGREEMENT
Exhibit 10.6
Execution Copy
This STOCKHOLDERS AGREEMENT (this “Agreement”) is made as of August 13, 2004 by and among (i) Innophos Holdings, Inc., a Delaware corporation (the “Company”), (ii) each of the Persons listed on Schedule I attached hereto (collectively, the “Xxxx Group”) and (iii) each of the other Persons listed on the signature pages attached hereto (each such other Person listed on the signature pages attached hereto, the Xxxx Group and each other Person who from time to time becomes a party hereto by executing and delivering a joinder substantially in the form attached hereto as Exhibit A are collectively referred to herein as the “Stockholders” and each as a “Stockholder”).
WHEREAS, the Company, as of the date hereof, is authorized by its Certificate of Incorporation to issue capital stock consisting of 11,111,111 shares of its Class L Common Stock, par value $0.001 per share (the “Class L Common”), and 99,999,999 shares of its Class A Common Stock, par value $0.001 per share (the “Class A Common”). The Class L Common and the Class A Common are collectively referred to herein as “Common Stock;”
WHEREAS, the Xxxx Group and the other Persons listed on the signature pages attached hereto have acquired shares of Common Stock; and
WHEREAS, the parties hereto desire to establish the composition of the Company’s board of directors (the “Board”), to restrict the sale, assignment, transfer, encumbrance or other disposition of the Common Stock, to provide for certain additional covenants and to provide for certain rights and obligations in respect thereto as hereinafter provided. Unless otherwise provided in this Agreement, capitalized terms used herein shall have the meanings set forth in Section 9 hereof.
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
1. Voting Agreement.
(a) Each holder of Stockholder Shares shall vote all of such holder’s Stockholder Shares and shall take all other necessary or desirable actions within such holder’s control (whether in such holder’s capacity as a stockholder, director or officer of the Company or otherwise, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings) and the Company shall take all necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and stockholder meetings) so that:
(i) the authorized number of directors on the Board shall be established by the holders of a majority of the Xxxx Shares (the “Xxxx Holders”), which authorized number of directors shall initially be five;
(ii) a number of persons designated by the Xxxx Holders shall be elected to the Board (which number shall initially be five), which depending upon the number of directors that
the Xxxx Holders elect to designate from time to time may, at their election, constitute at least a majority of the Board;
(iii) at all times, the composition of the board of directors of each of the Company’s Subsidiaries, if any (each, a “Sub Board”), shall be the same as that of the Board, unless otherwise approved by the Xxxx Holders;
(iv) any committee or subcommittee of the Board or any Sub Board (including any compensation committee or compensation subcommittee) shall be created only upon the approval of the Xxxx Holders and at least a majority of the members of such committee shall consist of members of the Board or such Sub Board designated by the Xxxx Holders pursuant to Section 1(a)(ii) above.
(b) The removal from the Board (with or without cause) of any person designated under Section 1(a) above by the Xxxx Holders shall be at the written request of the Xxxx Group and only upon such written request and under no other circumstances (except as otherwise required by law).
(c) In the event that any person designated under Section 1(a) above by the Xxxx Holders for any reason ceases to serve as a member of the Board during such person’s term of office, the resulting vacancy on the Board shall be filled by the Xxxx Group.
(d) If any party eligible to designate a member of the Board under Section 1(a) above fails to so designate, the individual previously holding such position shall be elected to such position, unless such individual has been removed as a member of the Board or fails or declines to serve.
(e) In the event that any provision of the Company’s bylaws or Certificate of Incorporation is inconsistent with any provision of this Section 1, the Company and the Stockholders shall take such action as may be necessary to amend any such provision in the Company’s bylaws or Certificate of Incorporation to remedy such inconsistency.
2. Provisions Concerning the Transfer of Stockholder Shares.
(a) General Restrictions on Transfer. Without the prior written consent of the Xxxx Group, no holder of Stockholder Shares (other than holders of Xxxx Shares) shall directly or indirectly sell, transfer (including by operation of law), assign, pledge, encumber or otherwise dispose of (including to the Company or any of its Subsidiaries) any interest in (a “Transfer”) any Stockholder Shares, other than in connection with (i) an Approved Sale (ii) the provisions of Section 2(b), 2(c) or 2(d) of this Agreement.
(b) Right of First Offer. At least thirty (30) days prior to any Transfer (other than with respect to a Public Sale or an Approved Sale) of any Stockholder Shares by any Additional Stockholder or any of such Person’s Permitted Transferees, the Person making such Transfer (the “Offering Stockholder”) shall deliver a written notice (the “Offer Notice”) to the Company and the Xxxx Group specifying in reasonable detail the number of Additional Stockholder Shares proposed to be Transferred, the proposed purchase price (which shall be payable solely in cash) and the other material terms and conditions of the Transfer. The Company may elect to purchase
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all or any portion of such Additional Stockholder Shares to be Transferred, upon the same terms and conditions as those set forth in the Offer Notice, by delivering a written notice of such election to the Additional Transferring Stockholder and the Xxxx Group within thirty (30) days after the Offer Notice has been delivered to the Company. If the Company has not elected to purchase all of the Additional Stockholder Shares to be Transferred within such period, the Xxxx Group may elect to purchase all or any portion of the Additional Stockholder Shares to be Transferred, upon the same terms and conditions as those set forth in the Offer Notice, by giving written notice of such election to the Additional Transferring Stockholder within forty-five (45) days after the Offer Notice has been given to the Company (the “Election Period”). If the Company and the Xxxx Group collectively elect to purchase fewer than all of the Additional Stockholder Shares specified in the Offer Notice and if the terms and conditions of this Section 2(b) have been met, then the Offering Stockholder may transfer the remaining portion of the Additional Stockholder Shares specified in the Offer Notice at a price and on terms no more favorable to the transferee(s) thereof than specified in the Offer Notice during the thirty-day period immediately following the expiration of the Election Period. Any Additional Stockholder Shares not transferred within such thirty-day period will continue to be subject to the provisions of this Section 2(b). If the Company or the Xxxx Group have elected to purchase Additional Stockholder Shares hereunder, the transfer of such shares shall be consummated as soon as practicable after the delivery of the election notice(s) to the Transferring Stockholder, but in any event within thirty (30) days after the expiration of the Election Period.
(c) Participation Rights.
(i) At least 15 days prior to any Transfer of any Xxxx Shares, the holder(s) of Xxxx Shares intending to Transfer Xxxx Shares (the “Transferring Stockholder”) will deliver to the other Stockholders (collectively, the “Other Stockholders”) a written notice (a “Sale Notice”) specifying in reasonable detail the identity of the prospective transferee(s) and the terms and conditions of the contemplated Transfer. The Other Stockholders may elect to participate in the contemplated Transfer by delivering written notice to the Transferring Stockholder within 15 days after delivery of the Sale Notice. If any Other Stockholders have elected to participate in such Transfer, each of the Transferring Stockholder and such Other Stockholders will be entitled to sell in the contemplated Transfer, at the same price and (subject to the last sentence of this Section 2(c)(i)) on the same terms, a number of shares of each class of Common Stock being transferred equal to the product obtained by multiplying (A) the quotient determined by dividing (x) the number of shares of such class of Common Stock owned by such Person by (y) the aggregate number of shares of such class of Common Stock then held by all Persons participating in such Transfer, including the Transferring Stockholder, and whether pursuant to this Agreement or otherwise (such Person’s “Pro Rata Share”) by (B) the number of shares of such class of Common Stock to be sold in the contemplated Transfer as set forth in the Sale Notice. Notwithstanding the foregoing, in the event that a Transferring Stockholder intends to Transfer shares of more than one class of Common Stock, the Other Stockholders participating in such Transfer shall be required to sell in the contemplated Transfer a pro rata portion of shares of all such classes of Common Stock, which portion shall be determined in the manner set forth immediately above.
(ii) The Transferring Stockholder will use reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the electing Other Stockholders
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in any contemplated Transfer, and the Transferring Stockholder will not Transfer any of its shares of Common Stock to the prospective transferee(s) unless simultaneously with such Transfer (A) the prospective transferee(s) purchases, at the same price and on the same terms, from the Other Stockholders the shares of Common Stock which they are entitled to sell to such prospective transferee pursuant to Section 2(c)(i) above or (B) the Transferring Stockholder purchases, at the same price and on the same terms, the number of shares of such class of Common Stock from the Other Stockholders that the Other Stockholders would have been entitled to sell pursuant to Section 2(c)(i) above.
(iii) The provisions of this Section 2(c) shall not apply to any Transfer by any holder of Xxxx Shares (A) in a Public Sale or pursuant to an Approved Sale, (B) to any director or employee of the Company or any of its Subsidiaries, (C) to any member of the Board of the Company and (D) to any Affiliate of such holder of Xxxx Shares. The provisions of this Section 2(c) will continue to be applicable to Xxxx Shares after any Transfer thereof pursuant to clause (D) of the first sentence of this Section 2(c)(iii) and the transferees of such Xxxx Shares shall agree, prior to any such Transfer, in writing to be bound by the provisions of this Agreement by executing and delivering to the Company a joinder in substantially the form attached hereto as Exhibit A.
(iv) The Transferring Stockholder and the Other Stockholders will bear their pro rata share (based upon the proceeds to be received by such Persons) of the costs of any Transfer pursuant to this Section 2(c) to the extent such costs are incurred for the benefit of all Persons participating in the Transfer and are not otherwise paid by the Company or the acquiring party. Costs incurred by Persons participating in the Transfer on their own behalf will not be considered costs of the Transfer hereunder.
(d) Permitted Transfers. The restrictions contained in this Section 2 shall not apply with respect to any Transfer of Stockholder Shares (A) by any Additional Stockholder pursuant to applicable laws of descent and distribution or to any member of such Additional Stockholder’s Family Group and (B) by any Additional Stockholder who is a former employee of the Company and its Subsidiaries to any other Additional Stockholder so long as such Transfer is consummated on or prior to the 90th day after the termination of such former employee’s employment with the Company and its Subsidiaries; provided that (i) the restrictions contained in this Section 2 shall continue to be applicable to such Stockholder Shares after any such Transfer and (ii) the transferees of such Stockholder Shares shall have agreed in writing to be bound by the provisions of this Agreement which affect the Stockholder Shares so transferred by executing a joinder in substantially the form attached hereto as Exhibit A. All transferees permitted under this Section 2(d) are collectively referred to herein as “Permitted Transferees.”
(e) Termination of Restrictions. The restrictions set forth in this Section 2 shall continue with respect to each Stockholder Share until the earlier of (i) the Transfer of such Stockholder Share in a Public Sale or an Approved Sale, or (ii) the consummation of a Public Offering.
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3. Approved Sale.
(a) If the Xxxx Holders request and the Board approves (i) a Transfer of a majority of the Company’s assets determined on a consolidated basis or a majority of the Company’s outstanding Common Stock (whether by merger (including one in which the Company is the surviving corporation), recapitalization, consolidation, reorganization, combination or otherwise) to any Independent Third Party or group of Independent Third Parties or (ii) a Transfer of any shares of Common Stock in connection with a Strategic Transaction (collectively an “Approved Sale”), each holder of Stockholder Shares will vote for, consent to and raise no objections against such Approved Sale. If the Approved Sale is structured as (i) a merger (including one in which the Company is the surviving corporation) or consolidation, each holder of Stockholder Shares will waive any dissenter’s rights, appraisal rights or similar rights in connection with such merger or consolidation and will not otherwise exercise any such right or (ii) Transfer of stock (including by recapitalization, consolidation, reorganization, combination or otherwise), each holder of Stockholder Shares will agree to sell all (or whatever is required to be sold in connection with such Approved Sale) of its Stockholder Shares and rights to acquire Stockholder Shares on the terms and conditions approved by the Xxxx Holders. Each holder of Stockholder Shares shall be obligated to join on a pro rata basis (based on the number of Stockholder Shares to be sold) in any indemnification or other obligations that the sellers of Stockholder Shares are required to provide in connection with the Approved Sale (other than any such obligations that relate solely to a particular Stockholder, such as indemnification with respect to representations and warranties given by a Stockholder regarding such Stockholder’s title to and ownership of Stockholder Shares, in respect of which only such Stockholder shall be liable). Each holder of Stockholder Shares will take all reasonable actions in connection with the consummation of the Approved Sale as requested by the Board (which actions may include, at the request of the Board, continuing arrangements among the stockholders of the Company substantially similar to the terms of this Agreement).
(b) The obligations of the holders of Common Stock with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale, each holder of Common Stock will Transfer such Common Stock on the same terms and will receive the same form of consideration and the same portion of the aggregate consideration that such holders of Common Stock would have received if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences set forth in the Certificate of Incorporation as in effect immediately prior to such Approved Sale; (ii) all holders of shares of a class of Common Stock will be given the same consideration with respect to each share of such class, and if any holders of a class of Common Stock are given an option as to the form and amount of consideration to be received, each holder of such class of Common Stock will be given the same option with respect to each share of such class; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Common Stock will be given an opportunity to exercise such rights prior to the consummation of the Approved Sale and participate in such sale as holders of such class of Common Stock.
(c) If the Company or the holders of the Company’s securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the holders of Stockholder Shares will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501) reasonably acceptable to the Company. If any holder of
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Stockholder Shares appoints a purchaser representative designated by the Company, the Company will pay the fees of such purchaser representative, but if any holder of Stockholder Shares declines to appoint the purchaser representative designated by the Company such holder will appoint another purchaser representative, and such holder will be responsible for the fees of the purchaser representative so appointed. This Section 3(c) shall apply only to holders of Stockholder Shares that are required to appoint a purchaser representative under Regulation D (or any successor regulation then in effect) promulgated by the Securities and Exchange Commission.
(d) Subject to Section 3(c) above, holders of Stockholder Shares will bear their pro rata share (based upon the proceeds to be received by holders of Stockholder Shares) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are incurred for the benefit of all holders of Common Stock and are not otherwise paid by the Company or the acquiring party. For purposes of this Section 3(d) above, costs incurred in exercising reasonable efforts to take all necessary actions for the consummation of an Approved Sale in accordance with Section 3(a) above shall be deemed to be for the benefit of all holders of Common Stock. Costs incurred by holders of Stockholder Shares on their own behalf will not be considered costs of the transaction hereunder.
4. Preemptive Rights.
(a) Except in connection with (i) issuances in a Public Offering, (ii) an Approved Sale, (iii) issuance of stock options pursuant to the 2004 Executive Stock Option Plan, (iv) issuances to any debt financing sources of the Company or its Subsidiaries in connection with a so-called “equity kicker” and (v) upon the conversion or exercise of securities convertible into or containing options or rights to acquire capital stock of the Company (to the extent such securities were issued in compliance with the provisions of this Section 4), if the Company authorizes the issuance or sale of any capital stock of the Company, or any securities convertible into or containing options or rights to acquire capital stock of the Company, the Company shall offer to sell to each holder of Stockholder Shares a portion of such stock or securities equal to the quotient determined by dividing (A) the number of shares of Common Stock held by such holder of Stockholder Shares by (B) the total number of shares of outstanding Common Stock (in each case on a fully diluted basis). If all of the purchasers of such capital stock or securities (the “New Investors”) are also required to acquire other securities in connection with their purchase, the holders of Stockholder Shares exercising their rights pursuant to this Section 4(a) shall also be required to purchase the same type of securities (on the same terms) that such other Persons are required to purchase. The purchase price for all stock and securities offered to each such holder of Stockholder Shares shall be the same price per share being paid by the New Investors and shall be payable in the same manner and at the same time as the closing of the sale to the New Investors.
(b) In order to exercise its purchase rights hereunder, each holder of Stockholder Shares must deliver a written notice to the Company describing its election hereunder within 15 days after receipt of written notice from the Company describing in reasonable detail the stock or securities being offered, the purchase price thereof, the payment terms and such holder’s percentage allotment.
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(c) Upon the expiration of the offering periods described above, the Company shall be entitled to sell such stock or securities that the holders of Stockholder Shares have not elected to purchase during the 270 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to holders of Stockholder Shares. Any stock or securities offered or sold by the Company to any Person after such 270 day period must be reoffered to the holders of Stockholder Shares pursuant to the terms of this Section 4.
(d) The provisions of this Section 4 will terminate and be of no further force or effect upon the consummation of a Public Offering.
(e) In the event that any holder of Stockholder Shares acquires capital stock or other securities convertible into or containing options or rights to acquire capital stock pursuant to this Section 4 in a preferred stock or debt offering by the Company which includes an offering or sale to both a member of the Xxxx Group and an Independent Third Party, each holder of Stockholder Shares agrees to exercise all the rights it may have with respect to the Company (such as covenants and remedies) arising out of such securities acquired pursuant to this Section 4 in the same manner as the Xxxx Group.
5. Covenants. The Company covenants and agrees that, so long as the Xxxx Group continues to hold, in the aggregate, at least 25% of the Xxxx Shares held by it on the Closing Date, the Company shall comply with the covenants set forth in this Section 5.
(a) The Company shall, and shall cause each of its Subsidiaries to, afford to the Xxxx Group and its Affiliates, advisors and other representatives full access (upon reasonable advance notice to the Company) to the Company’s and its Subsidiaries’ respective properties, assets records, files and any other information as the Xxxx Group may request and shall permit the Xxxx Group to meet with the Company’s and its Subsidiaries’ respective officers and other management personnel and professional advisors to obtain such information regarding the Company and its Subsidiaries and their respective businesses and prospects as the Xxxx Group may request;
(b) At the beginning of each fiscal year (but in no event later than January 31 of such fiscal year), the Company shall prepare and deliver to the Xxxx Group an annual budget for such fiscal year for the Company and its Subsidiaries in form and substance reasonably satisfactory to the Xxxx Group (each, an “Annual Budget”).
(c) The Company shall deliver to the Xxxx Group, as soon as practicable after the last day of each month (other than any day that is also the last day of a fiscal quarter), but in no event later than 30 days following the end of such month or such later date as such financial statements are delivered to the Company’s senior lenders pursuant to the Senior Credit Facility, a copy of (i) an unaudited consolidated balance sheet for the Company and its Subsidiaries as the end of such month and (ii) unaudited consolidated statements of income, retained earnings and consolidated cash flows of the Company and its Subsidiaries for such month. The financial information provided pursuant to this Section 5(c) shall be accompanied by a report showing the Company’s performance during the period and through the date covered by such financial information relative to the Annual Budget applicable to such period. The Company shall cease delivering the information required by this Section 5(c) after the Company is a Public Company.
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(d) The Company shall deliver to the Xxxx Group, as soon as practicable after the end of each of the first three quarterly fiscal periods in each fiscal year of the Company (but in no event later than 45 days following the end of such periods or such later date as such financial statements are delivered to the Company’s senior lenders pursuant to the Senior Credit Facility), a copy of (i) an unaudited consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and (ii) unaudited consolidated statements of income, retained earnings and consolidated cash flows of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters, for the portion of the fiscal year ending with such quarter), subject to normal year end audit adjustments. Such statements shall be prepared in accordance with generally accepted accounting principles in the United States of America as in effect from time to time (“GAAP”). The financial information provided pursuant to this Section 5(d) shall be accompanied by a report showing the Company’s performance during the period and through the date covered by such financial information relative to the Annual Budget applicable to such period. The Company shall cease delivering the information required by this Section 5(d) after the Company is a Public Company.
(e) The Company shall deliver to the Xxxx Group, as soon as practicable after the end of each fiscal year of the Company (but in no event later than 90 days following the end of such year or such later date as such financial statements are delivered to the Company’s senior lenders pursuant to the Senior Credit Facility), a copy of (A) an audited consolidated balance sheet of the Company and its subsidiaries as at the end of such year, and (B) audited consolidated statements of income, retained earnings and consolidated cash flows of the Company and its subsidiaries for such year. Such statements shall be prepared in accordance with GAAP. The financial information provided pursuant to this Section 5(e) shall be accompanied by a report showing the Company’s performance during the period and through the date covered by such financial information relative to the Annual Budget applicable to such period. The Company shall cease delivering the information required by this Section 5(e) after the Company is a Public Company.
(f) The Company shall, and shall cause each of its Subsidiaries to, provide prompt written notice to the Xxxx Group of any report, notice or other communication received by the Company or any of its Subsidiaries from any of their respective accountants or other professional advisors or from any Governmental Authority. Such notice shall include a copy of such report, notice or other communication.
(g) The Company shall, with respect to itself and each of its Subsidiaries, maintain directors’ and officer’s and other insurance on terms and conditions (including with respect to premiums, coverage amounts and deductibles) reasonably satisfactory to the Xxxx Group, in each case naming the Company or such Subsidiary, as applicable, as the beneficiary thereunder.
(h) The Company shall, and shall cause each of its Subsidiaries to, give the Xxxx Group prompt written notice of any material development, whether positive or negative, that affects, or would be reasonably likely to affect, the respective businesses of the Company and its Subsidiaries.
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6. Public Offering.
(a) In the event that the Board approves a Public Offering, the holders of Stockholder Shares will use reasonable efforts to take all necessary action in connection with the consummation of a Public Offering. In the event that such Public Offering is an underwritten offering, each holder of Stockholder Shares will consent to and vote for a recapitalization, reorganization and/or exchange of the Common Stock into securities that the managing underwriters, the Board and holders of a majority of the shares of Common Stock then outstanding find acceptable and will take all necessary or desirable actions in connection with the consummation of the recapitalization, reorganization and/or exchange.
(b) In the event the Board approves a public offering or sale of the Common Stock of the Company (or any other securities representing, or exercisable for or convertible into, shares of Common Stock) pursuant to the securities laws of a country other than the United States of America, the Board shall have the power to amend this Agreement in such manner as it shall deem reasonably necessary to ensure that the provisions of this Agreement that apply to or are otherwise implicated by a Public Offering or a sale of securities in accordance with the securities laws of the United States of America will apply in a substantially similar manner to any offering or sale under such foreign securities laws.
7. Certain Approval Rights.
(a) So long as the Xxxx Group continues to hold, in the aggregate, at least 25% of the Xxxx Shares held by it on the Closing Date, without the prior written approval of the Xxxx Group, the Company shall not, and shall cause each of its Subsidiaries not to:
(i) enter into any transaction or series of transactions with any stockholder, director, officer, employee or Affiliate;
(ii) other than any securities issued pursuant to the 2004 Executive Stock Option Plan, authorize, create or issue any securities (or any rights or securities directly or indirectly convertible into or exercisable or exchangeable for securities);
(iii) invest in or purchase any interest in any company, partnership or business (whether by a purchase of assets, purchase of stock, merger or otherwise) or enter into any joint venture or similar transaction, or make any investment outside the ordinary course of business;
(iv) engage in any transaction outside the ordinary course of business, including entering into the ownership, active management or operation of any business other than the businesses of the Company and it Subsidiaries as of the date hereof or terminating any part of its current business;
(v) amend or modify any stock option plan or employee stock ownership plan as in existence as of the Closing, including the 2004 Executive Stock Option Plan, adopt any new stock option plan or employee stock ownership plan or issue any shares of Common Stock to its employees other than pursuant to 2004 Executive Stock Option Plan;
(vi) create, incur, assume or suffer to exist any material indebtedness;
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(vii) make material capital expenditures (including material expenditures under capital leases); or
(viii) initiate or settle any material claim, lawsuit or other legal proceeding.
8. Legend. Each certificate evidencing Stockholder Shares and each certificate issued in exchange for or upon the transfer of any Stockholder Shares (if such shares remain Stockholder Shares as defined herein after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER AND VOTING RESTRICTIONS PURSUANT TO A STOCKHOLDERS AGREEMENT DATED AS OF AUGUST 13, 2004 AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND CERTAIN OF THE COMPANY’S STOCKHOLDERS, AS MAY BE AMENDED FROM TIME TO TIME. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
The Company shall imprint such legend on certificates evidencing Stockholder Shares outstanding prior to the date hereof. The legend set forth above shall be removed from the certificates evidencing any shares which cease to be Stockholder Shares.
9. Definitions.
“2004 Executive Stock Option Plan” means the Company’s 2004 Executive Stock Option Plan as approved by the Board, and as the same may be amended, restated or otherwise modified from time to time.
“Additional Stockholders” means any Person (other than any member of the Xxxx Group) who acquires Common Stock and who agrees to be bound by the terms of this Agreement pursuant to the terms hereof.
“Additional Stockholder Shares” means any Common Stock acquired by Additional Stockholders and any equity securities issued or issuable directly or indirectly with respect to such Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Any particular shares constituting Additional Stockholder Shares that are transferred in compliance with the provisions of this Agreement shall continue to constitute Additional Stockholder Shares in the hands of any such transferee; such shares will cease to be Additional Stockholder Shares only when they have been (i) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, or (ii) sold to the public pursuant to Rule 144 (or by similar provision then in force) under the Securities Act.
“Affiliate” shall mean with respect to any Person, any other Person controlling, controlled by or under common control with the Person and, in the case of a Person which is a partnership, any partner of such Person.
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“Agreement” has the meaning set forth in the preamble hereto.
“Annual Budget” has the meaning set forth in Section 5(b) hereof.
“Approved Sale” has the meaning set forth in Section 3 hereof.
“Xxxx Group” has the meaning set forth in the preamble hereto.
“Bain Holders” has the meaning set forth in Section 1 hereof.
“Bain Shares” means any Common Stock acquired by the Xxxx Group (or its Affiliates) and any equity securities issued or issuable directly or indirectly with respect to such Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Any particular shares constituting Bain Shares that are Transferred in compliance with the provisions of this Agreement shall continue to constitute Bain Shares in the hands of any such transferee; such shares will cease to be Bain Shares only when they have been (i) Transferred to any employee of the Company or any of its Subsidiaries or to any member of the Board, (ii) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, or (iii) sold to the public pursuant to Rule 144 (or by similar provision then in force) under the Securities Act.
“Board” has the meaning set forth in the recitals hereto.
“Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by law to be closed in the State of New York.
“Certificate of Incorporation” means the Company’s certificate of incorporation in effect at the time as of which any determination is being made.
“Class A Common” has the meaning set forth in the recitals hereto.
“Class L Common” has the meaning set forth in the recitals hereto.
“Closing Date” has the meaning set forth in the Purchase Agreement.
“Common Stock” has the meaning set forth in the recitals hereto.
“Company” has the meaning set forth in the preamble hereto.
“Election Period” has the meaning set forth in Section 2(b) hereof.
“Family Group” means, with respect to any natural person, such person’s spouse, siblings, ancestors and descendants (whether natural or adopted) and any trust or other entity solely for the benefit of such person and/or such person’s spouse, their respective ancestors and/or descendants.
“GAAP” has the meaning set forth in Section 5 hereof.
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“Governmental Authority” means any Federal, state, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body.
“Holdco” has the meaning set forth in Section 14 hereof.
“Independent Third Party” means any Person who, immediately prior to the contemplated transaction, does not own in excess of 5% of the Company’s Common Stock on a fully diluted basis (a “5% Owner”), who is not controlling, controlled by or under common control with any such 5% Owner.
“New Investors” has the meaning set forth in Section 4(a) hereof.
“Offer Notice” has the meaning set forth in Section 2(b) hereof.
“Offering Stockholder” has the meaning set forth in Section 2(b) hereof.
“Other Stockholders” has the meaning set forth in Section 2(c) hereof.
“Permitted Transferee” has the meaning set forth in Section 2(d) hereof.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“Pro Rata Share” has the meaning set forth in Section 2(c) hereof.
“Public Company” means a company (i) which is subject to the reporting requirements of Section 15(d) of the Securities Exchange Act or (ii) any of whose securities are registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act.
“Public Offering” means any underwritten sale of Common Stock pursuant to an effective registration statement under the Securities Act filed with the Securities and Exchange Commission on Form S-1 (or a successor form adopted by the Securities and Exchange Commission); provided that the following shall not be considered a Public Offering: (i) any issuance of Common Stock as consideration or financing for a merger or acquisition or as part of debt financing and (ii) any issuance of Common Stock or rights to acquire Common Stock to employees of the Company or its Subsidiaries as part of an incentive or compensation plan.
“Public Sale” means any sale of Stockholder Shares to the public pursuant to an offering registered under the Securities Act or to the public pursuant to the provisions of Rule 144 adopted under the Securities Act.
“Purchase Agreement” means that certain Agreement of Purchase and Sale, dated as of June 10, 2004, by and among Rhodia Inc., Rhodia Canada Inc., Rhodia de Mexico S.A. de C.V., Rhodia Overseas Ltd, Rhodia Consumer Specialties Limited, Rhodia, S.A. and Innophos, Inc. (f/k/a Phosphates Acquisition, Inc.), as the same may be amended, restated or otherwise modified from time to time.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among the Company and stockholders of the Company parties thereto, as the same may be amended, restated or otherwise modified from time to time.
“Restricted Stockholder Shares” means all Stockholder Shares other than Bain Shares.
“Sale Notice” has the meaning set forth in Section 2(c) hereof.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Senior Credit Facility” means the Credit Agreement dated as of the date hereof by and among Innophos, Inc. (f/k/a Phosphates Acquisition, Inc.), as Borrower, the several lenders from time to time parties thereto, Bear Xxxxxxx Corporate Lending Inc., as Administrative Agents and the other parties names thereto, as the same may be amended, restated or otherwise modified from time to time.
“Stockholder” has the meaning set forth in the preamble hereto.
“Stockholder Shares” means the Bain Shares and the Additional Stockholder Shares.
“Strategic Transaction” means the Transfer in connection with an acquisition by the Company or to a strategic partner, i.e., a Person who, as determined by the Board, will benefit the Company as a result of experience, expertise, knowledge or relationships, other than experience, expertise, knowledge or relationships principally with respect to capital markets activities.
“Sub Board” has the meaning set forth in Section 1(a) hereof.
“Subsidiary” means with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, association or other business entity.
“Transfer” has the meaning set forth in Section 2(a) hereof.
“Transferring Stockholder” has the meaning set forth in Section 2(c) hereof.
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10. Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any Stockholder Shares in violation of any provision of this Agreement shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Stockholder Shares as the owner of such shares for any purpose.
11. Amendment and Waiver. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of the Company and a majority of the Bain Holders. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
13. Entire Agreement. Except as otherwise expressly set forth herein, this Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.
14. Successors and Assigns. Except as otherwise provided in this Agreement, this Agreement shall bind and inure to the benefit of and be enforceable by the Company and its successors and permitted assigns and the Stockholders and any subsequent holders of Stockholder Shares and the respective successors and permitted assigns of each of them, so long as they hold Stockholder Shares. If the holders of Stockholder Shares create a new holding company (“Holdco”), the result of which is that the shareholders of the Company immediately before such event become all the shareholders of Holdco, then the provisions of this Agreement will, in addition to the Company, apply to Holdco in the same manner as if Holdco were substituted for the Company throughout this Agreement.
15. Counterparts. This Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.
16. Remedies. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Company and any Stockholder shall have the right to injunctive relief, in addition to all of its rights and remedies at law or in equity, to enforce the provisions of this Agreement. Nothing contained in this Agreement shall be construed to confer upon any Person who is not a signatory hereto any rights or benefits, as a third party beneficiary or otherwise.
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17. Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when personally delivered, sent by telecopy (with receipt confirmed) on a Business Day during regular business hours of the recipient (or, if not, on the next succeeding Business Day) or two Business Days after sent by reputable overnight express courier (charges prepaid). Such notices, demands and other communications shall be sent to the following Persons at the following addresses:
If to the Company, to:
Innophos, Inc.
X.X. Xxx 0000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Chief Executive Officer and Chief Financial Officer
with a copy (which shall not constitute notice to the Company), to:
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
If to the Xxxx Group, to:
Xxxx Capital NY, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxx
with a copy (which shall not constitute notice to the Xxxx Group), to:
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
If to any other Person party to this Agreement, to:
the address for such Person shown in the books and records of the Company;
or to such other Person as the recipient party has specified by prior written notice to the sending party.
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18. Delivery by Facsimile. This Agreement and any signed agreement or instrument entered into in connection thereto or contemplated thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation of a contract and each such party forever waives any such defense.
19. Governing Law. The corporate law of the State of Delaware will govern all issues concerning the relative rights of the Company and its Stockholders. All other issues concerning this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York.
20. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement on the day and year first above written.
| INNOPHOS HOLDINGS, INC. | ||||
| By: |
/s/ Xxxx Xxxxxxxxx | |||
| Name: |
Xxxx Xxxxxxxxx | |||
| Title: |
Chief Financial Officer | |||
| XXXX CAPITAL FUND VII, LLC. | ||
| By: | Xxxx Capital Fund VII, L.P., its sole member | |
| By: | Xxxx Capital Partners VII, L.P., its General Partner | |
| By: | Xxxx Capital Investors, LLC, its General Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
| XXXX CAPITAL FUND VIII, LLC. | ||
| By: | Xxxx Capital Fund VIII, L.P., its sole member | |
| By: | Xxxx Capital Partners VIII, L.P., its General Partner | |
| By: | Xxxx Capital Investors, LLC, its General Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
| BCIP ASSOCIATES III, LLC. | ||
| By: | BCIP Associates III, its Manager | |
| By: | Xxxx Capital Investors, LLC, its Managing Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
Signatures continued on the following page
| BCIP TRUST ASSOCIATES III, LLC. | ||
| By: | BCIP Trust Associates III, its Manager | |
| By: | Xxxx Capital Investors, LLC, its Managing Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
| BCIP ASSOCIATES III-B, LLC | ||
| By: | BCIP Associates III-B, its Manager | |
| By: | Xxxx Capital Investors, LLC, its Managing Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
| BCIP TRUST ASSOCIATES III-B, LLC | ||
| By: | BCIP Trust Associates III-B, its Manager | |
| By: | Xxxx Capital Investors, LLC, its Managing Partner | |
| BY: |
/s/ Xxxxxxx X. Xxxx | |
| Managing Director | ||
Signatures continued on the following page
| K&E INVESTMENT PARTNERS, LLC. - 2004-B DIF | ||||
| By: |
/s/ Xxxx Xxxx | |||
| Name: |
Xxxx Xxxx | |||
| Title: |
Partner | |||
Management Investor Signature Page
| /s/ Xxxxxxxx Xxxxx |
| Xxxxxxxx Xxxxx |
| /s/ Xxxx Xxxxxxx Xxxxxx Xxxxx |
| Xxxx Xxxxxxx Xxxxxx Xxxxx |
| /s/ Xxxx Xxxxxxx |
| Xxxx Xxxxxxx |
| /s/ Xxxxx Xxxxxx |
| Xxxxx Xxxxxx |
| /s/ Xxxx Xxxxxxxxx |
| Xxxx Xxxxxxxxx |
| /s/ Xxxxx Xxxxxxxx |
| Xxxxx Xxxxxxxx |
Signatures continued on the following page
SCHEDULE I
Xxxx Group
Xxxx Capital Fund VII, LLC
Xxxx Capital Fund VIII, LLC
BCIP Associates III, LLC
BCIP Trust Associates III, LLC
BCIP Associates III-B, LLC
BCIP Trust Associates III-B, LLC
Continued Signature Page to the Stockholders Agreement
EXHIBIT A
FORM OF JOINDER TO
THIS JOINDER (this “Joinder”) to that certain Stockholders Agreement, dated as of August [ ], 2004, by and among Innophos, Inc., a Delaware corporation (the “Company”), and certain stockholders of the Company (the “Agreement”), is made and entered into as of [ ] by and between the Company and [Holder] (“Holder”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of the Company’s [Common Stock] (“Holder Stock”), and the Agreement and the Company requires Holder, as a holder of [Common Stock], to become a party to the Agreement, and Holder agrees to do so in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:
| 1. | Agreement to be Bound. Holder hereby agrees that upon execution of this Joinder, Holder shall become a party to the Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement as though an original party thereto and shall be deemed [an Additional Stockholder] for all purposes thereof. In addition, Holder hereby agrees that all [Common Stock] held by Holder shall be deemed [Additional Stockholder Shares] for all purposes of the Agreement. [Section 1 to be changed if Holder is (x) a member of the Xxxx Group or (y) an Additional Stockholder who is an employee or member of management of the Company or any of its Subsidiaries.] |
| 2. | Successors and Assigns. Except as otherwise provided herein, this Joinder shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and Holder and any subsequent holders of Holder Stock and the respective successors and assigns of each of them, so long as they hold any shares of Holder Stock. |
| 3. | Counterparts. This Joinder may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. |
| 4. | Governing Law. THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD |
A - 1
| CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. |
| 5. | Descriptive Headings. The descriptive headings of this Joinder are inserted for convenience only and do not constitute a part of this Joinder. |
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of the date first above written.
| INNOPHOS HOLDINGS, INC. | ||
| By: |
||
| Name: |
||
| Title: |
||
| [HOLDER] | ||
| By: |
||
| Name: |
||
| Title: |
||
Continued Signature Page to the Stockholders Agreement
